Bermuda
|
1-15731
|
98-0365432
|
(State or other jurisdiction
|
(Commission
|
(IRS Employer
|
of incorporation)
|
File Number)
|
Identification No.)
|
Seon Place, 4TH Floor
141 Front Street
PO Box HM 845
Hamilton, HM 19, Bermuda
|
Not Applicable
|
|
(Address of principal executive offices)
|
(Zip Code)
|
ITEM 2.02
|
DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
|
ITEM 9.01
|
FINANCIAL STATEMENTS AND EXHIBITS
|
(c)
|
Exhibits
|
||
Exhibit No.
|
Description
|
||
99.1
|
News Release of the registrant,
|
||
dated April 25, 2018
|
|
|
EVEREST RE GROUP, LTD.
|
|
|
|
|
|
|
By:
|
/S/ CRAIG HOWIE
|
|
|
|
Craig Howie
|
|
|
|
Executive Vice President and
|
|
|
|
Chief Financial Officer
|
|
EXHIBIT INDEX
|
Exhibit
|
|||
Number
|
Description of Document
|
Page No.
|
|
99.1
|
News Release of the registrant,
|
||
dated April 25, 2018
|
5
|
NEWS RELEASE
|
|
·
|
Gross written premiums for the quarter were $1.9 billion, an increase of 21% compared to the first quarter of 2017. On a constant dollar basis, premium was up 19%, quarter over quarter. Worldwide reinsurance premiums were up 22% to $1.4 billion, with growth across each segment primarily driven by increased pro-rata premium. Direct insurance premiums were up 16%, from first quarter 2017, to $505 million, consistent with the growth trends noted through 2017.
|
·
|
The combined ratio was 93.3% for the quarter compared to 86.0% in the first quarter of 2017. Excluding the previously announced catastrophe losses arising from the 2017 Northern and Southern California wildfires, the attritional combined ratio was 87.1% compared to 84.5% in the same period last year. The higher attritional loss ratio is driven by changes in mix of business as well as higher retrocessional costs in the quarter.
|
·
|
Net investment income increased 13% for the quarter to $138.3 million.
|
·
|
Net after-tax realized and unrealized capital losses amounted to $19.4 million and $199.4 million, respectively.
|
·
|
Cash flow from operations was $195.6 million compared to $381.8 million for the same period in 2017
|
·
|
For the quarter, the annualized after-tax operating income¹ return on average adjusted shareholders' equity² was 10.5%.
|
·
|
Shareholders' equity ended the quarter at $8.3 billion, relatively flat compared to year end 2017. Book value per share was modestly down from $204.95 at December 31, 2017 to $203.62 at March 31, 2018.
|
|
Three Months Ended
|
|||||||||||||||
|
March 31,
|
|||||||||||||||
(Dollars in thousands, except per share amounts)
|
2018
|
2017
|
||||||||||||||
|
(unaudited)
|
|||||||||||||||
|
Per Diluted
|
Per Diluted
|
||||||||||||||
|
Common
|
Common
|
||||||||||||||
|
Amount
|
Share
|
Amount
|
Share
|
||||||||||||
|
||||||||||||||||
Net income (loss)
|
$
|
210,318
|
$
|
5.11
|
$
|
291,643
|
$
|
7.07
|
||||||||
After-tax net realized capital gains (losses)
|
(19,355
|
)
|
(0.47
|
)
|
32,110
|
0.78
|
||||||||||
After-tax net foreign exchange income (expense)
|
9,933
|
0.24
|
(7,558
|
)
|
(0.18
|
)
|
||||||||||
Impact of TCJA enactment
|
-
|
-
|
-
|
-
|
||||||||||||
|
||||||||||||||||
After-tax operating income (loss)
|
$
|
219,740
|
$
|
5.34
|
$
|
267,091
|
$
|
6.48
|
||||||||
|
||||||||||||||||
(Some amounts may not reconcile due to rounding.)
|
EVEREST RE GROUP, LTD.
|
||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||
AND COMPREHENSIVE INCOME (LOSS)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
(Dollars in thousands, except per share amounts)
|
2018
|
2017
|
||||||
(unaudited)
|
||||||||
REVENUES:
|
||||||||
Premiums earned
|
$
|
1,619,427
|
$
|
1,312,097
|
||||
Net investment income
|
138,294
|
122,289
|
||||||
Net realized capital gains (losses):
|
||||||||
Other-than-temporary impairments on fixed maturity securities
|
(70
|
)
|
(1,229
|
)
|
||||
Other-than-temporary impairments on fixed maturity securities
|
||||||||
transferred to other comprehensive income (loss)
|
-
|
-
|
||||||
Other net realized capital gains (losses)
|
(24,831
|
)
|
53,957
|
|||||
Total net realized capital gains (losses)
|
(24,901
|
)
|
52,728
|
|||||
Net derivative gain (loss)
|
273
|
2,630
|
||||||
Other income (expense)
|
12,064
|
(4,966
|
)
|
|||||
Total revenues
|
1,745,157
|
1,484,778
|
||||||
CLAIMS AND EXPENSES:
|
||||||||
Incurred losses and loss adjustment expenses
|
1,057,177
|
770,788
|
||||||
Commission, brokerage, taxes and fees
|
357,639
|
282,269
|
||||||
Other underwriting expenses
|
96,284
|
75,887
|
||||||
Corporate expenses
|
8,996
|
8,457
|
||||||
Interest, fees and bond issue cost amortization expense
|
7,418
|
8,964
|
||||||
Total claims and expenses
|
1,527,514
|
1,146,365
|
||||||
INCOME (LOSS) BEFORE TAXES
|
217,643
|
338,413
|
||||||
Income tax expense (benefit)
|
7,325
|
46,770
|
||||||
NET INCOME (LOSS)
|
$
|
210,318
|
$
|
291,643
|
||||
Other comprehensive income (loss), net of tax:
|
||||||||
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period
|
(190,624
|
)
|
19,548
|
|||||
Reclassification adjustment for realized losses (gains) included in net income (loss)
|
(8,772
|
)
|
(2,199
|
)
|
||||
Total URA(D) on securities arising during the period
|
(199,396
|
)
|
17,349
|
|||||
Foreign currency translation adjustments
|
17,699
|
11,893
|
||||||
Reclassification adjustment for amortization of net (gain) loss included in net income (loss)
|
1,815
|
2,004
|
||||||
Total benefit plan net gain (loss) for the period
|
1,815
|
2,004
|
||||||
Total other comprehensive income (loss), net of tax
|
(179,882
|
)
|
31,246
|
|||||
COMPREHENSIVE INCOME (LOSS)
|
$
|
30,436
|
$
|
322,889
|
||||
EARNINGS PER COMMON SHARE:
|
||||||||
Basic
|
$
|
5.14
|
$
|
7.12
|
||||
Diluted
|
5.11
|
7.07
|
||||||
Dividends declared
|
1.30
|
1.25
|
EVEREST RE GROUP, LTD.
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
March 31,
|
December 31,
|
|||||||
(Dollars and share amounts in thousands, except par value per share)
|
2018
|
2017
|
||||||
(unaudited)
|
||||||||
ASSETS:
|
||||||||
Fixed maturities - available for sale, at market value
|
$
|
14,844,581
|
$
|
14,756,834
|
||||
(amortized cost: 2018, $14,997,018; 2017, $14,689,598)
|
||||||||
Fixed maturities - available for sale, at fair value
|
1,821
|
-
|
||||||
Equity securities - available for sale, at market value (cost: 2018, $0; 2017, $130,287)
|
-
|
129,530
|
||||||
Equity securities - available for sale, at fair value
|
1,169,531
|
963,572
|
||||||
Short-term investments
|
338,694
|
509,682
|
||||||
Other invested assets (cost: 2018, $1,527,701; 2017, $1,628,753)
|
1,527,701
|
1,631,850
|
||||||
Cash
|
700,586
|
635,067
|
||||||
Total investments and cash
|
18,582,914
|
18,626,535
|
||||||
Accrued investment income
|
100,129
|
97,704
|
||||||
Premiums receivable
|
1,906,427
|
1,844,881
|
||||||
Reinsurance receivables
|
1,356,888
|
1,348,226
|
||||||
Funds held by reinsureds
|
197,419
|
292,927
|
||||||
Deferred acquisition costs
|
420,724
|
411,587
|
||||||
Prepaid reinsurance premiums
|
321,203
|
288,211
|
||||||
Income taxes
|
265,228
|
299,438
|
||||||
Other assets
|
362,264
|
382,283
|
||||||
TOTAL ASSETS
|
$
|
23,513,196
|
$
|
23,591,792
|
||||
LIABILITIES:
|
||||||||
Reserve for losses and loss adjustment expenses
|
$
|
11,793,346
|
$
|
11,884,321
|
||||
Future policy benefit reserve
|
49,106
|
51,014
|
||||||
Unearned premium reserve
|
2,089,628
|
2,000,556
|
||||||
Funds held under reinsurance treaties
|
16,965
|
18,030
|
||||||
Commission reserves
|
23,251
|
30,660
|
||||||
Other net payable to reinsurers
|
244,280
|
218,017
|
||||||
4.868% Senior notes due 6/1/2044
|
396,864
|
396,834
|
||||||
6.6% Long term notes due 5/1/2067
|
236,585
|
236,561
|
||||||
Accrued interest on debt and borrowings
|
7,668
|
2,727
|
||||||
Equity index put option liability
|
12,205
|
12,477
|
||||||
Unsettled securities payable
|
49,569
|
38,743
|
||||||
Other liabilities
|
249,549
|
332,620
|
||||||
Total liabilities
|
15,169,016
|
15,222,560
|
||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Preferred shares, par value: $0.01; 50,000 shares authorized;
|
||||||||
no shares issued and outstanding
|
-
|
-
|
||||||
Common shares, par value: $0.01; 200,000 shares authorized; (2018) 69,187
|
||||||||
and (2017) 69,044 outstanding before treasury shares
|
692
|
691
|
||||||
Additional paid-in capital
|
2,163,519
|
2,165,768
|
||||||
Accumulated other comprehensive income (loss), net of deferred income tax expense
|
||||||||
(benefit) of ($11,933) at 2018 and $9,356 at 2017
|
(341,974
|
)
|
(160,891
|
)
|
||||
Treasury shares, at cost; 28,208 shares at 2018 and 2017
|
(3,322,244
|
)
|
(3,322,244
|
)
|
||||
Retained earnings
|
9,844,187
|
9,685,908
|
||||||
Total shareholders' equity
|
8,344,180
|
8,369,232
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
23,513,196
|
$
|
23,591,792
|
EVEREST RE GROUP, LTD.
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
(Dollars in thousands)
|
2018
|
2017
|
||||||
(unaudited)
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$
|
210,318
|
$
|
291,643
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Decrease (increase) in premiums receivable
|
(56,826
|
)
|
(220,367
|
)
|
||||
Decrease (increase) in funds held by reinsureds, net
|
95,416
|
1,211
|
||||||
Decrease (increase) in reinsurance receivables
|
236
|
(30,158
|
)
|
|||||
Decrease (increase) in income taxes
|
55,905
|
37,010
|
||||||
Decrease (increase) in prepaid reinsurance premiums
|
(32,194
|
)
|
(23,704
|
)
|
||||
Increase (decrease) in reserve for losses and loss adjustment expenses
|
(121,415
|
)
|
99,095
|
|||||
Increase (decrease) in future policy benefit reserve
|
(1,907
|
)
|
83
|
|||||
Increase (decrease) in unearned premiums
|
85,598
|
125,614
|
||||||
Increase (decrease) in other net payable to reinsurers
|
24,410
|
13,666
|
||||||
Increase (decrease) in losses in course of payment
|
45,919
|
113,815
|
||||||
Change in equity adjustments in limited partnerships
|
(24,596
|
)
|
(10,998
|
)
|
||||
Distribution of limited partnership income
|
15,524
|
5,384
|
||||||
Change in other assets and liabilities, net
|
(142,935
|
)
|
12,999
|
|||||
Non-cash compensation expense
|
8,336
|
7,501
|
||||||
Amortization of bond premium (accrual of bond discount)
|
8,950
|
11,746
|
||||||
Net realized capital (gains) losses
|
24,901
|
(52,728
|
)
|
|||||
Net cash provided by (used in) operating activities
|
195,640
|
381,812
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from fixed maturities matured/called - available for sale, at market value
|
512,384
|
525,873
|
||||||
Proceeds from fixed maturities sold - available for sale, at market value
|
364,288
|
428,491
|
||||||
Proceeds from equity securities sold - available for sale, at market value
|
-
|
18,802
|
||||||
Proceeds from equity securities sold - available for sale, at fair value
|
199,875
|
140,315
|
||||||
Distributions from other invested assets
|
1,061,894
|
1,165,905
|
||||||
Cost of fixed maturities acquired - available for sale, at market value
|
(1,150,718
|
)
|
(1,552,743
|
)
|
||||
Cost of fixed maturities acquired - available for sale, at fair value
|
(1,836
|
)
|
-
|
|||||
Cost of equity securities acquired - available for sale, at market value
|
-
|
(1,282
|
)
|
|||||
Cost of equity securities acquired - available for sale, at fair value
|
(310,426
|
)
|
(66,902
|
)
|
||||
Cost of other invested assets acquired
|
(947,290
|
)
|
(1,184,270
|
)
|
||||
Net change in short-term investments
|
169,705
|
(45,178
|
)
|
|||||
Net change in unsettled securities transactions
|
46,708
|
236,702
|
||||||
Net cash provided by (used in) investing activities
|
(55,416
|
)
|
(334,287
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Common shares issued during the period for share-based compensation, net of expense
|
(9,383
|
)
|
(6,629
|
)
|
||||
Dividends paid to shareholders
|
(53,240
|
)
|
(51,281
|
)
|
||||
Cost of shares withheld for taxes on settlements of share-based compensation awards
|
(14,245
|
)
|
(11,517
|
)
|
||||
Net cash provided by (used in) financing activities
|
(76,868
|
)
|
(69,427
|
)
|
||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
2,163
|
8,220
|
||||||
Net increase (decrease) in cash
|
65,519
|
(13,682
|
)
|
|||||
Cash, beginning of period
|
635,067
|
481,922
|
||||||
Cash, end of period
|
$
|
700,586
|
$
|
468,240
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||
Income taxes paid (recovered)
|
$
|
(51,253
|
)
|
$
|
9,593
|
|||
Interest paid
|
2,422
|
105
|